Due Diligence & Risk Management Consulting

FactRight specializes in third party due diligence and risk management consulting for the alternative investment community. Our forensic accounting, risk mitigation, and investment professionals are experts in investigating and explaining investment sponsors and their offerings.

Whether you are looking to meet compliance regulations, connect a product to an audience, or just explore the possibilities of alternative investments, our industry expertise will help you build stronger, more valuable client relationships.

Scott Smith

President and CEO

A Note from Scott

“When you choose FactRight to be your partner in the alternative investment community, you’ll get best-in-class service from the team who puts relationships first. Our specialized offerings are unique in the industry and have been trusted by successful financial advisory firms for over a decade. We are constantly working to create clarity out of complexity and to provide easy access to the most detailed reports available.

To this end, we’ve recently reworked our entire website; I invite you to look around. I hope you’ll learn something new about us and reach out with any questions or opportunities for us to work together.”

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Recent Blogs from FactRight

Each quarter, FactRight publishes sector insight reports regarding the various facets of commercial real estate. These sector insights help broker dealers and RIAs stay informed about the health of each commercial asset type, as well as assess which real estate-related alternative investment products may be right for their platforms. Below are a few key takeaways from FactRight’s Q4 2017 sector research; if you want to learn more, you can download the full-length sector insight reports from FactRight’s Report Center. […]

Last week, the SEC published its 2018 examination priorities. In January, FINRA published its 2018 examination priorities letter. Each year, we review both examination letters to determine how regulatory focuses may impact our clients’ alternative investment-related practices. Although neither the SEC nor FINRA mentions ‘alternative investments’ by name in this year’s priorities, it’s clear that AI considerations are lurking not too far under the surface. […]

So far in 2018, we at FactRight have been kept very busy reviewing DST offerings for our clients, including deals from new sponsors entering the market. Recent tax reform spared section 1031 exchanges for interests in real estate, and the industry breathed a sigh of relief, as it expects demand for syndicated deals will continue to grow. Our friends at Mountain Dell Consulting report that 29 sponsors raised more than $1.9 billion in aggregate equity in 2017, making it the most active year for syndicated 1031 offerings since 2007 (during which $2.8 billion was raised by 64 sponsors). The sentiment appears to be that the growth we’ve seen in the overall market since 2011 will continue into the foreseeable future. […]

A robust pipeline of new interval fund registrations indicates continued growth is likely throughout 2018. Total interval fund assets now exceed $23.8 billion. Total net assets for the sector grew 56% over the most recent 12-month period, to $19.9 billion. Although newly launched funds are gaining momentum, the sector is highly concentrated in the top 10 funds. […]

Things continue to look up for Reg A+. In the fourth quarter of 2017, the SEC qualified 25 Tier 2 offerings, which (just like last quarter) set new quarterly record. Of the Tier 2 140 offerings qualified since the end of 2015 (and not subsequently withdrawn or requalified), the SEC green-lit 62% of them in 2017. We plotted the relatively steady growth in qualifications the top chart below the text of this post. […]

The passage of tax reform —the Tax Cuts and Jobs Act of 2017—will undoubtedly reduce the uncertainty that has weighed on commercial real estate investors as major tax proposals have been contemplated, which in and of itself is a benefit. Now that the final provisions are known, the Act has been lauded by many as a great boon for commercial property owners. Some analysts have predicted the newly amended tax code should specifically strengthen demand in the multifamily sector and incentivize corporations into putting more capital into real estate assets and new development. Of course, it is difficult for us at this time to determine exactly how the effects of tax reform will play out long term for the alternative investment industry, and what the unintended consequences will prove to be. […]

Happy New Year! Last month, we launched a series of blog posts on private securities offerings, which you can read here (Regulation D), here (distribution waterfalls), and here (differences between public and private direct participation programs). Let’s continue our discussion of private placements by exploring typical fees and expenses for private programs. […]